Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 05, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Neonode, Inc | |
Entity Central Index Key | 87,050 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 43,724,984 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 950 | $ 6,129 |
Accounts receivable, net | 489 | 1,106 |
Projects in process | 1,044 | 200 |
Prepaid expenses and other current assets | 715 | 513 |
Total current assets | 3,198 | 7,948 |
Property and equipment, net | 582 | 654 |
Total assets | 3,780 | 8,602 |
Current liabilities: | ||
Accounts payable | 1,121 | 566 |
Accrued expenses | 1,510 | 935 |
Deferred revenues | 1,873 | 3,403 |
Current portion of capital lease obligation | 57 | 61 |
Total current liabilities | 4,561 | 4,965 |
Capital lease obligation, net of current portion | 297 | 367 |
Total liabilities | $ 4,858 | $ 5,332 |
Commitments and contingencies | ||
Stockholders' (deficit) equity: | ||
Common stock, 70,000,000 shares authorized with par value $0.001 per share; 40,524,984 and 40,455,352 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | $ 40 | $ 40 |
Additional paid-in capital | 169,958 | 169,010 |
Accumulated other comprehensive income | 82 | 149 |
Accumulated deficit | (171,161) | (165,929) |
Total Neonode Inc. stockholder's (deficit) equity | (1,081) | $ 3,270 |
Noncontrolling interests | 3 | |
Total stockholders' (deficit) equity | (1,078) | $ 3,270 |
Total liabilities and stockholders' (deficit) equity | $ 3,780 | $ 8,602 |
Series B Preferred Stock | ||
Stockholders' (deficit) equity: | ||
Series B Preferred stock, 54,425 shares authorized with par value $0.001 per share; 83 shares issued and outstanding at September 30, 2015 and December 31, 2014. (In the event of dissolution, each share of Series B Preferred stock has a liquidation preference equal to par value of $0.001 per share over the shares of common stock) |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited)(Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Common stock, shares authorized | 70,000,000 | 70,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 40,524,984 | 40,455,352 |
Common stock, shares outstanding | 40,524,984 | 40,455,352 |
Series B Preferred Stock | ||
Preferred stock, shares authorized | 54,425 | 54,425 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 83 | 83 |
Preferred stock, shares outstanding | 83 | 83 |
Preferred stock, liquidation preference | $ 0.001 | $ 0.001 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statements of Operations [Abstract] | ||||
Net revenues | $ 3,113 | $ 1,126 | $ 8,152 | $ 3,005 |
Cost of revenues | 909 | 422 | 1,984 | 1,040 |
Gross margin | 2,204 | 704 | 6,168 | 1,965 |
Operating expenses: | ||||
Product research and development | 1,555 | 1,767 | 4,763 | 5,293 |
Sales and marketing | 845 | 725 | 2,648 | 2,523 |
General and administrative | 1,152 | 1,457 | 3,908 | 5,275 |
Total operating expenses | 3,552 | 3,949 | 11,319 | 13,091 |
Operating loss | (1,348) | $ (3,245) | (5,151) | $ (11,126) |
Other expense: | ||||
Interest expense | $ 4 | 12 | ||
Other expense, net | 28 | |||
Total other expense | $ 4 | 40 | ||
Loss before provision for income taxes | (1,352) | $ (3,245) | (5,191) | $ (11,126) |
Provision for income taxes | 16 | 41 | 1 | |
Net loss including noncontrolling interests | $ (1,368) | $ (3,245) | $ (5,232) | $ (11,127) |
Less: Net loss attributable to noncontrolling interests | ||||
Net loss attributable to Neonode Inc. | $ (1,368) | $ (3,245) | $ (5,232) | $ (11,127) |
Loss per common share: | ||||
Basic and diluted loss per share | $ (0.03) | $ (0.08) | $ (0.13) | $ (0.28) |
Basic and diluted - weighted average number of common shares outstanding | 40,525 | 40,455 | 40,493 | 39,219 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statements of Comprehensive Loss [Abstract] | ||||
Net loss | $ (1,368) | $ (3,245) | $ (5,232) | $ (11,127) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (20) | (82) | (67) | (17) |
Comprehensive loss | $ (1,388) | $ (3,327) | $ (5,299) | $ (11,144) |
Less: Comprehensive income (loss) attributable to noncontrolling interests | ||||
Comprehensive loss attributable to Neonode Inc. | $ (1,388) | $ (3,327) | $ (5,299) | $ (11,144) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss (including noncontrolling interests) | $ (5,232) | $ (11,127) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | $ 948 | 1,594 |
Bad debt expense | $ 18 | |
Loss on disposal of property and equipment | $ 28 | |
Depreciation and amortization | 138 | $ 145 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 617 | 393 |
Projects in process | (847) | 229 |
Prepaid expenses and other current assets | (231) | (176) |
Accounts payable and accrued expenses | 1,221 | 252 |
Deferred revenues | (1,528) | (381) |
Net cash used in operating activities | (4,886) | (9,053) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (137) | (98) |
Net cash used in investing activities | $ (137) | (98) |
Cash flows from financing activities: | ||
Proceeds from sales of common stock, net of offering costs | $ 9,253 | |
Contributions from noncontrolling interests | $ 3 | |
Proceeds from exercise of stock warrants | $ 36 | |
Principal payments on capital lease obligation | $ (43) | (18) |
Net cash (used in) provided by financing activities | (40) | 9,271 |
Effect of exchange rate changes on cash | (116) | (91) |
Net increase (decrease) in cash | (5,179) | 29 |
Cash at beginning of period | 6,129 | 8,815 |
Cash at end of period | 950 | 8,844 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 41 | 1 |
Cash paid for interest | $ 12 | 8 |
Supplemental disclosure of non-cash investing and financing activities | ||
Purchase of equipment with capital lease obligations | $ 530 |
Interim Period Reporting
Interim Period Reporting | 9 Months Ended |
Sep. 30, 2015 | |
Interim Period Reporting [Abstract] | |
Interim Period Reporting | 1. Interim Period Reporting The accompanying unaudited interim condensed consolidated financial statements, include all adjustments, consisting of normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations and cash flows for the interim periods presented. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of results for a full fiscal year or any other period. The accompanying condensed consolidated financial statements for the three and nine months ended September 30, 2015 and 2014 have been prepared by us, pursuant to the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally contained in financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Operations Neonode Inc. (collectively with its subsidiaries, is referred to in this Form 10-Q Report as “Neonode”, “we”, “us”, “our” or the “Company”), develops and licenses user interfaces and optical infrared touch technology. We license our multi-touch technology to Original Equipment Manufacturers (“OEMs”) and Original Design Manufacturers (“ODMs”) who incorporate it into devices that they produce and sell. Liquidity We have incurred significant operating losses and negative cash flows from operations since our inception. The Company incurred net losses of approximately $1.4 million and $5.2 million and $3.2 million and $11.1 million for the three and nine months ended September 30, 2015 and 2014, respectively, and had an accumulated deficit of approximately $171.2 million and $165.9 million as of September 30, 2015 and December 31, 2014, respectively. In addition, the Company used cash in operating activities of approximately $4.9 million and $9.1 million for the nine months ended September 30, 2015 and 2014, respectively. In June 2014, we filed a shelf registration statement with the SEC that became effective on June 12, 2014. We may from time to time issue shares of our common stock under our shelf registration in amounts, at prices, and on terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in a prospectus supplement and any other offering materials, at the time of the offering. On October 13, 2015, we issued 3,200,000 shares of common stock registered under the shelf registration at the price of $1.90 per share. Net proceeds to the Company after underwriting discounts and all offering expenses were $5.6 million (See Note 9). After the offering there are 1,800,000 remaining shares registered and available for issuance under our shelf registration. We believe that we have sufficient cash to operate for the next twelve months. While there is no assurance that the Company can meet its projected cash flows, management anticipates that it can continue operations for at least the next twelve months. In the future, we may require sources of capital in addition to cash on hand to continue operations and to implement our strategy. If our operations do not become cash flow positive, we may be forced to seek credit line facilities from financial institutions, equity investments or debt arrangements. No assurances can be given that we will be successful in obtaining such additional financing on reasonable terms, or at all. If adequate funds are not available on acceptable terms, or at all, we may be unable to adequately fund our business plans and it could have a negative effect on our business, results of operations and financial condition. In addition, if funds are available, the issuance of equity securities or securities convertible into equity could dilute the value of shares of our common stock and cause the market price to fall, and the issuance of debt securities could impose restrictive covenants that could impair our ability to engage in certain business transactions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of significant accounting policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of Neonode Inc. and its wholly owned subsidiaries, as well as Pronode Technologies AB, a 51% majority owned subsidiary of Neonode Technologies AB. The remaining 49% of Pronode Technologies AB is owned by Propoint AB, located in Gothenburg, Sweden. Pronode Technologies AB was organized to sell engineering services within the automotive markets. All inter-company accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated balance sheet at September 30, 2015 and the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2015 and cash flows for the nine months ended September 30, 2015, include our accounts and those of our wholly owned subsidiaries, Neonode Technologies AB (Sweden), Neonode Americas Inc. (U.S.), Neonode Japan Inc. (Japan), NEON Technology Inc. (U.S.), Neno User Interface Solutions AB (Sweden), Neonode Korea Ltd. (South Korea) and Neonode Taiwan Ltd. (Taiwan), as well as Pronode Technologies AB (Sweden), a 51% majority owned subsidiary of Neonode Technologies AB. The noncontrolling interests in Pronode Technologies AB are reported separately under the heading “Net loss attributable to noncontrolling interests” in the condensed consolidated statements of operations, below comprehensive loss under the heading “Comprehensive income (loss) attributable to noncontrolling interests” in the condensed consolidated statements of comprehensive loss and shown as a separate component of stockholders’ (deficit) equity in the condensed consolidated balance sheet. See “Noncontrolling Interests” for further discussion. The audited condensed consolidated balance sheet at December 31, 2014 includes our accounts and those of our wholly owned subsidiaries, Neonode Technologies AB (Sweden), Neonode Americas Inc. (U.S.), Neonode Japan Inc. (Japan), NEON Technology Inc. (U.S.), Neno User Interface Solutions AB (Sweden) and Neonode Korea Ltd. (South Korea). The unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2014 and cash flows for the nine months ended September 30, 2014 include our accounts and those of our wholly owned subsidiaries, Neonode Technologies AB (Sweden), Neonode Americas Inc. (U.S.), Neonode Japan Inc. (Japan), NEON Technology Inc. (U.S.) and Neno User Interface Solutions AB (Sweden). Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires making estimates and assumptions that affect, at the date of the consolidated financial statements, the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. Actual results could differ from these estimates. Significant estimates include, but are not limited to, collectability of accounts receivable, the achievement of substantive milestones and vendor-specific objective evidence (“VSOE”) of fair value for purposes of revenue recognition (or deferral of revenue), recoverability of capitalized project costs and long-lived assets, the valuation allowance related to our deferred tax assets and the fair value of options and warrants issued for stock-based compensation. Concentration of Cash Balance Risks Cash balances are maintained at various banks in the U.S., Japan, Korea, Taiwan and Sweden. For deposits held with financial institutions in the U.S. the U.S. Federal Deposit Insurance Corporation, provides basic deposit coverage with limits up to $250,000 per owner. The Swedish government provides insurance coverage up to 100,000 Euro per customer and covers deposits in all types of accounts. The Japanese government provides insurance coverage up to 10,000,000 Yen per customer. The Korea Deposit Insurance Corporation provides insurance coverage up to 50,000,000 Won per customer. The Central Deposit Insurance Corporation in Taiwan provides insurance coverage up to 3,000,000 Taiwan Dollar per customer. At times, deposits held with financial institutions may exceed the amount of insurance provided. Accounts Receivable and Allowance for Doubtful Accounts Our accounts receivable are stated at net realizable value. Our policy is to maintain allowances for estimated losses resulting from the inability of our customers to make required payments. Credit limits are established through a process of reviewing the financial history and stability of each customer. Where appropriate, we obtain credit rating reports and financial statements of the customer when determining or modifying its credit limits. We regularly evaluate the collectability of our trade receivable balances based on a combination of factors. When a customer’s account balance becomes past due, we initiate dialogue with the customer to determine the cause. If it is determined that the customer will be unable to meet its financial obligation, such as in the case of a bankruptcy filing, deterioration in the customer’s operating results or financial position or other material events impacting its business, we record a specific allowance to reduce the related receivable to the amount we expect to recover. Should all efforts fail to recover the related receivable, we will write off the account. We also record an allowance for all customers based on certain other factors including the length of time the receivables are past due and historical collection experience with customers. Our allowance for doubtful accounts was $167,000 as of September 30, 2015 and December 31, 2014. Projects in Process Projects in process consist of costs incurred toward the completion of various projects for certain customers. These costs are primarily comprised of direct engineering labor costs and project-specific equipment costs. These costs are capitalized on our condensed consolidated balance sheet as an asset and deferred until revenue for each project is recognized in accordance with our revenue recognition policy. Costs capitalized in projects in process were $1,044,000 and $200,000 as of September 30, 2015 and December 31, 2014, respectively. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method based upon estimated useful lives of the assets as follows: Estimated useful lives Computer equipment 3 years Furniture and fixtures 5 years Equipment 7 years Equipment purchased under a capital lease is recognized over the term of the lease, if that lease term is shorter than the estimated useful life. Upon retirement or sale of property and equipment, cost and accumulated depreciation and amortization are removed from the accounts and any gains or losses are reflected in the condensed consolidated statement of operations. Maintenance and repairs are charged to expense as incurred. Long-lived Assets We assess any impairment by estimating the future cash flow from the associated asset in accordance with relevant accounting guidance. If the estimated undiscounted future cash flow related to these assets decreases or the useful life is shorter than originally estimated, we may incur charges for impairment of these assets. As of September 30, 2015, we believe there was no impairment of our long-lived assets. There can be no assurance, however, that market conditions will not change or sufficient demand for our products and services will continue, which could result in impairment of long-lived assets in the future. Foreign Currency Translation and Transaction Gains and Losses The functional currency of our foreign subsidiaries is the applicable local currency, the Swedish Krona, the Japanese Yen, the South Korean Won and the Taiwan Dollar. The translation from Swedish Krona, Japanese Yen, South Korean Won and Taiwan Dollar to U.S. Dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for income statement accounts using a weighted-average exchange rate during the period. Gains or (losses) resulting from translation are included as a separate component of accumulated other comprehensive income (loss). Foreign currency translation losses were $(20,000) and $(67,000) during the three and nine months ended September 30, 2015, respectively, compared to translation losses of $(82,000) and $(17,000) during the same periods in 2014, respectively. Gains resulting from foreign currency transactions are included in general and administrative expenses in the accompanying condensed consolidated statements of operations and were $11,000 and $42,000 during the three and nine months ended September 30, 2015, respectively, compared to $86,000 and $120,000 during the same periods in 2014, respectively. Concentration of Credit and Business Risks Our customers are located in U.S., Europe and Asia. As of September 30, 2015, five customers represented approximately 83% of the Company’s accounts receivable. As of December 31, 2014, three customers represented approximately 87% of the Company’s accounts receivable. Our net revenues for the three and nine months ended September 30, 2015 were earned from twenty-three and thirty-five customers, respectively. Customers who accounted for 10% or more of our net revenues during the three months ended September 30, 2015 are as follows: ● Barnes & Noble – 22% ● Hewlett Packard Company – 21% ● Autoliv Development AB – 18% Customers who accounted for 10% or more of our net revenues during the nine months ended September 30, 2015 are as follows: ● Hewlett Packard Company –26% ● Amazon – 15% ● Autoliv Development AB – 18% Our net revenues for the three and nine months ended September 30, 2014 were earned from sixteen and twenty-eight customers. Customers who accounted for 10% or more of our net revenues during the three months ended September 30, 2014 are as follows: ● Hewlett Packard Company – 30% Customers who accounted for 10% or more of our net revenues during the nine months ended September 30, 2014 are as follows: ● Hewlett Packard Company – 16% ● Kobo Inc. – 10% ● Netronix Inc. – 10% ● Leap Frog – 13% Revenue Recognition Licensing Revenues: We derive revenue from the licensing of internally developed intellectual property (“IP”). We enter into IP licensing agreements that generally provide licensees the right to incorporate our IP components in their products with terms and conditions that vary by licensee. Fees under these agreements may include license fees relating to our IP and royalties payable following the distribution by our licensees of products incorporating the licensed technology. The license for our IP has standalone value and can be used by the licensee without maintenance and support. We follow U.S. GAAP for revenue recognition as per unit royalty products are distributed or licensed by our customers. For technology license arrangements that do not require significant modification or customization of the underlying technology, we recognize technology license revenue when: (1) we enter into a legally binding arrangement with a customer for the license of technology; (2) the customer distributes or licenses the products; (3) the customer payment is deemed fixed or determinable and free of contingencies or significant uncertainties; and (4) collection is reasonably assured. Our customers report to us the quantities of products distributed or licensed by them after the end of the reporting period stipulated in the contract, generally 30 to 45 days after the end of the month or quarter. We recognize licensing revenue in the period in which royalty reports are received, rather than the period in which the products are distributed or to which the license relates. Explicit return rights are not offered to customers. There have been no returns through September 30, 2015. Engineering Services: We may sell engineering consulting services to our customers on a flat rate or hourly rate basis. We recognize revenue from these services when all of the following conditions are met: (1) evidence existed of an arrangement with the customer, typically consisting of a purchase order or contract; (2) our services were performed and risk of loss passed to the customer; (3) we completed all of the necessary terms of the contract; (4) the amount of revenue to which we were entitled was fixed or determinable; and (5) we believed it was probable that we would be able to collect the amount due from the customer. To the extent that one or more of these conditions has not been satisfied, we defer recognition of revenue. Generally, we recognize revenue as the engineering services stipulated under the contract are completed and accepted by our customers. Engineering services are performed under a signed Statement of Work (“SOW”) with a customer. The deliverables and payment terms stipulated under the SOW provide guidance on the project revenue recognition. Revenues from contracts that are short-term in nature and related costs that are difficult to estimate are accounted for under the completed contract method. Revenues from contracts with substantive defined milestones that we have determined are reasonable, relevant to all the deliverables and payment terms in the SOW that are commensurate with the efforts required to achieve the milestones are recognized under the milestone recognition method. Estimated losses on all SOW projects are recognized in full as soon as they become evident. In the quarters ended September 30, 2015 and 2014, $165,000 and $0 were recorded as cost of sales due to expected losses related to two SOW projects, respectively. Deferred Revenues From time-to-time we receive pre-payments from our customers related to future services or future license fee revenues. We defer the license fees until we have met all accounting requirements for revenue recognition as per unit royalty products are distributed and royalty reports are received. Engineering development fee revenues are deferred until such time as the engineering work has been completed and accepted by our customers. Advertising Advertising costs are expensed as incurred. Advertising costs for the three and nine months ended September 30, 2015 amounted to approximately $46,000 and $74,000, respectively. Advertising costs for the three and nine months ended September 30, 2014 amounted to approximately $18,000 and $147,000, respectively. Product Research and Development Research and development (“R&D”) costs are expensed as incurred. R&D costs consist mainly of personnel related costs in addition to some external consultancy costs such as testing, certifying and measurements. Stock-Based Compensation Expense We measure the cost of employee services received in exchange for an award of equity instruments, including stock options, based on the estimated fair value of the award on the grant date, and recognize the value as compensation expense over the period the employee is required to provide services in exchange for the award, usually the vesting period, net of estimated forfeitures. We account for equity instruments issued to non-employees at their estimated fair value. The measurement date for the estimated fair value for the equity instruments issued is determined at the earlier of (1) the date at which a commitment for performance by the consultant or vendor is reached, or (2) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instruments is primarily recognized over the term of the consulting agreement. The estimated fair value of the stock-based compensation is periodically re-measured and income or expense is recognized during the vesting term. When determining stock-based compensation expense involving options and warrants, we determine the estimated fair value of options and warrants using the Black-Scholes option pricing model. Noncontrolling Interests The Company provides either in the condensed consolidated statement of changes in equity, if presented, or in the notes to consolidated financial statements, a reconciliation at the beginning and the end of the period of the carrying amount of total equity (net assets), equity (net assets) attributable to the parent, and equity (net assets) attributable to the noncontrolling interest that separately discloses: (1) Net income. (2) Transactions with owners acting in their capacity as owners, showing separately contributions from and distributions to owners. (3) Each component of other comprehensive income. Income Taxes We recognize deferred tax liabilities and assets for the expected future tax consequences of items that have been included in the consolidated financial statements or tax returns. We estimate income taxes based on rates in effect in each of the jurisdictions in which we operate. Deferred income tax assets and liabilities are determined based upon differences between the financial statement and income tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The realization of deferred tax assets is based on historical tax positions and expectations about future taxable income. Valuation allowances are recorded against net deferred tax assets when, in our opinion, realization is uncertain based on the “more likely than not” criteria of the accounting guidance. Based on the uncertainty of future pre-tax income, we fully reserved our net deferred tax assets as of September 30, 2015 and December 31, 2014. In the event we were to determine that we would be able to realize our deferred tax assets in the future, an adjustment to the deferred tax asset would increase income in the period such determination was made. The provision for income taxes represents the net change in deferred tax amounts, plus income taxes paid or payable for the current period. We follow U.S. GAAP related accounting for uncertainty in income taxes, which provisions include a two-step approach to recognizing, de-recognizing and measuring uncertainty in income taxes. As a result, we did not recognize a liability for unrecognized tax benefits. As of September 30, 2015 and December 31, 2014, we had no unrecognized tax benefits. Net Loss per Share Net loss per share amounts has been computed based on the weighted average number of shares of common stock outstanding during the three and nine months ended September 30, 2015 and 2014. Net loss per share, assuming dilution amounts from common stock equivalents, is computed based on the weighted-average number of shares of common stock and potential common stock equivalents outstanding during the period. The weighted-average number of shares of common stock and potential common stock equivalents used in computing the net loss per share for the three and nine months ended September 30, 2015 and 2014 exclude the potential common stock equivalents, as the effect would be anti-dilutive (See Note 8). Other Comprehensive Income (Loss) Our other comprehensive income (loss) includes foreign currency translation gains and losses. The cumulative amount of translation gains and losses are reflected as a separate component of stockholders’ equity in the condensed consolidated balance sheets as accumulated other comprehensive income. Cash Flow Information Cash flows in foreign currencies have been converted to U.S. dollars at an approximate weighted-average exchange rate for the respective reporting periods. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 8.47 and 6.94 Swedish Krona to one U.S. Dollar for the three months ended September 30, 2015 and 2014, respectively. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 8.40 and 6.67 Swedish Krona to one U.S. Dollar for the nine months ended September 30, 2015 and 2014, respectively. The exchange rate for the condensed consolidated balance sheets was 8.42 and 7.80 Swedish Krona to one U.S. Dollar as of September 30, 2015 and December 31, 2014, respectively. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 122.23 and 103.87 Japanese Yen to one U.S. Dollar for the three months ended September 30, 2015 and 2014, respectively. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 120.90 and 102.94 Japanese Yen to one U.S. Dollar for the nine months ended September 30, 2015 and 2014, respectively. The exchange rate for the condensed consolidated balance sheets was 119.75 and 119.93 Japanese Yen to one U.S. Dollar as of September 30, 2015 and December 31, 2014, respectively. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 1,167.99 South Korean Won to one U.S. Dollar for the three months ended September 30, 2015. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 1,121.60 South Korean Won to one U.S. Dollar for the nine months ended September 30, 2015. The exchange rate for the condensed consolidated balance sheets was 1,195.03 and 1,096.73 South Korean Won to one U.S. Dollar as of September 30, 2015 and December 31, 2014, respectively. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 31.95 Taiwan Dollar to one U.S. Dollar for the three months ended September 30, 2015. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 31.43 Taiwan Dollar to one U.S. Dollar for the nine months ended September 30, 2015. The exchange rate for the condensed consolidated balance sheet was 33.06 Taiwan Dollar to one U.S. Dollar as of September 30, 2015. Fair Value of Financial Instruments We disclose the estimated fair values for all financial instruments for which it is practicable to estimate fair value. Financial instruments including cash, accounts receivable, accounts payable and accrued expenses and are deemed to approximate fair value due to their short maturities. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers (Topic 606)” In August 2014, the FASB issued ASU No. 2014-15, “ Presentation of Financial Statements - Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern |
Deferred Revenues
Deferred Revenues | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Revenues [Abstract] | |
Deferred revenues | 3. Deferred Revenues We defer license fees until we have met all accounting requirements for revenue recognition as per unit royalty products are distributed and royalty reports are received. Engineering development fee revenues are deferred until such time as the engineering work has been completed and accepted by our customers. As of September 30, 2015 and December 31, 2014, we had $1.1 million and $3.0 million, respectively, of deferred license fee revenue related to prepayments for future license fees from two and five customers, and a total of $0.8 million and $0.4 million, respectively, of deferred engineering development fees from one and five customers, respectively. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 4. Stockholders’ Equity Common Stock During the nine months ended September 30, 2015, a warrant holder exercised warrants to purchase 80,000 shares of common stock using the cashless net exercise provision allowed in the warrant and received 69,632 shares of our common stock. Preferred Stock We have one class of preferred stock outstanding. The terms of the Series B Preferred stock are as follows: Dividends and Distributions The holders of shares of Series B Preferred stock are entitled to participate with the holders of our common stock with respect to any dividends declared on the common stock in proportion to the number of shares of common stock issuable upon conversion of the shares of Series B Preferred stock held by them. Liquidation Preference In the event of any liquidation, dissolution, or winding up of our operations, either voluntary or involuntary, subject to the rights of the Series B Preferred stock and Senior Preferred stock, shall be entitled to receive, after any distribution to the holders of senior preferred stock and prior to and in preference to any distribution to the holders of common stock, $0.001 for each share of Series B Preferred stock then outstanding. Voting The holders of shares of Series B Preferred stock have one vote for each share of Series B Preferred stock held by them. Conversion Initially, each share of Series B Preferred stock was convertible into one share of our common stock. On March 31, 2009, our stockholders approved a resolution to increase the authorized share capital, and to increase the conversion ratio to 132.07 shares of our common stock for each share of Series B Preferred stock. Conversion of Preferred Stock Issued to Common Stock The following table summarizes the amounts as of September 30, 2015. Shares of Preferred Stock Not Exchanged Conversion Ratio Shares of Common Stock after Conversion of all Outstanding Shares of Preferred Stock Not yet Exchanged at September 30, 2015 Series B Preferred stock 83 132.07 10,962 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 5. Stock-Based Compensation The stock-based compensation expense for the three and nine months ended September 30, 2015 and 2014 reflects the estimated fair value of the vested portion of options granted to employees, directors and eligible consultants. In addition, on March 3, 2015, the Company issued to certain Swedish employees an aggregate of 265,000 immediately vested options to purchase shares of the Company’s common stock at an exercise price of $4.15 per share that expire on March 3, 2018. Under Sweden law, the employees are required to purchase the stock options from the Company that was recorded as stock-based compensation expense. The purchase price of the stock options was determined to be $0.70 per option for a total amount of $185,500. At the discretion of the Board of Directors, the Company absorbed the cost and recorded the amount as a bonus to these employees on date of grant. Stock-based compensation expense in the accompanying condensed consolidated statements of operations is as follows (in thousands): Three months ended Nine months ended 2015 2014 2015 2014 Product research and development $ 100 $ 73 $ 422 $ 433 Sales and marketing 68 51 240 302 General and administrative 8 55 286 859 Total stock-based compensation expense $ 176 $ 179 $ 948 $ 1,594 Remaining unrecognized Stock-based compensation $ 862 The remaining unrecognized expense related to stock options will be recognized on a straight line basis monthly as compensation expense over the remaining vesting period, which approximates 1.7 years. The estimated fair value of stock-based awards is calculated using the Black-Scholes option pricing model, even though this model was developed to estimate the fair value of freely tradable, fully transferable options without vesting restrictions, which differ significantly from our stock options. The Black-Scholes model also requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term and forfeiture rate of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior, as well as expected behavior on outstanding options. The risk-free rate is based on the U.S. Treasury rates in effect during the corresponding period of grant. The expected volatility is based on the historical volatility of our stock price. These factors could change in the future, which would affect fair values of stock options granted in such future periods, and could cause volatility in the total amount of the stock-based compensation expense reported in future periods. We have adopted equity incentive plans for which stock options and restricted stock awards are available to grant to employees, consultants and directors. Except for the 265,000 options issued to certain Swedish employees (see above), all employee, consultant and director stock options granted under our stock option plans have an exercise price equal to the market value of the underlying common stock on the grant date. There are no vesting provisions tied to performance conditions for any options, as vesting for all outstanding option grants was based only on continued service as an employee, consultant or director. All of our outstanding stock options and restricted stock awards are classified as equity instruments. During the nine months ended September 30, 2015, our shareholders approved the Neonode Inc. 2015 Stock Incentive Plan (the “2015 Plan”) which replaces our 2006 Equity Incentive Plan (the “2006 Plan”). Under the 2015 Plan, 2,100,000 shares of common stock have been reserved for awards, including nonqualified stock option grants and restricted stock grants to officers, employees, non-employee direct ors and consultants. The terms of the awards granted under the 2015 Plan are set by our compensation committee at its discretion. During the three and nine months ended September 30, 2015, no stock options or restricted stock were granted under the 2015 Plan. Accordingly, as of September 30, 2015 we had three equity incentive plans: ● The 1998 Non-Officer Stock Option Plan (the “1998 Plan”), which expired in June 2008; ● The 2006 Equity Incentive Plan; and ● The 2015 Stock Incentive Plan We also had one non-employee director stock option plan as of September 30, 2015: ● The 2001 Non-Employee Director Stock Option Plan (the “Director Plan”), A summary of the combined activity under all of the stock option plans is set forth below: Number of Options Outstanding Weighted Average Exercise Price Outstanding at January 1, 2015 1,709,400 $ 4.92 Granted 590,000 3.56 Expired (3,200 ) 86.25 Outstanding at September 30, 2015 2,296,200 $ 4.46 The aggregate intrinsic value of the 2,296,200 stock options that are outstanding, vested and expected to vest as of September 30, 2015 was approximately $13,000. For the three and nine months ended September 30, 2015 and 2014, we recorded $0.2 million and $0.9 million and $0.2 million and $1.6 million, respectively, of compensation expense related to the vesting of stock options, including options granted to certain Swedish employees, as described above. The fair value of the stock-based compensation was calculated using the Black-Scholes option pricing model as of the date of grant of the stock option. During the nine months ended September 30, 2015, we granted options to purchase 500,000 shares of our common stock to employees and options to purchase 90,000 shares of our common stock to four members of our board of directors with a grant date fair value of $0.7 million computed using the Black-Scholes option pricing model. The total options granted include 265,000 options issued to certain Swedish employees, as described above. The weighted-average grant date fair value of the options granted during the nine months ended September 30, 2015 was $1.26 per share. See below for assumptions used in the valuation of stock options: For the nine months ended September 30, 2015 Annual dividend yield - Expected life (years) 1.50 – 4.35 Risk-free interest rate 0.47% - 1.41% Expected volatility 68% - 72% The 1998 Plan terminated effective June 15, 2008. Although we can no longer issue stock options out of the plans, the outstanding options at the date of termination will remain outstanding and vest in accordance with their terms. Options granted under the Director Plan vested over a one to four-year period, expire five to seven years after the date of grant and have exercise prices reflecting market value of the shares of our common stock on the date of grant. Stock options granted under the 1998 and 2006 Plans are exercisable over a maximum term of ten years from the date of grant, vest in various installments over a one to four-year period and have exercise prices reflecting the market value of the shares of common stock on the date of grant. Warrants A summary of all warrant activity is set forth below: September 30, 2015 Outstanding and exercisable Warrants Weighted Average Exercise Price Weighted Average January 1, 2015 3,335,073 $ 4.45 0.93 Granted -- -- -- Expired/cancelled (16,000 ) 1.00 -- Exercised (80,000 ) 0.50 -- Outstanding and exercisable, September 30, 2015 3,239,073 $ 4.57 0.17 Outstanding Warrants to Purchase Description Issue Date Exercise Price Shares Expiration Date December 2010 Employee Warrants 12/3/2010 $ 1.63 200,000 12/3/2015 February 2011 Legal Advisor Warrant 2/22/2011 $ 2.00 80,000 2/22/2016 March 2011 Investor Warrants 3/9/2011 $ 3.13 349,973 3/9/2016 March 2011 Investor Warrants 4/7/2011 $ 3.13 34,100 4/7/2016 May 2014 Agent Warrant 5/15/2014 $ 5.09 75,000 11/15/2015 May 2014 Investor Warrant 5/15/2014 $ 5.09 2,500,000 11/15/2015 Total Warrants Outstanding 3,239,073 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Indemnities and Guarantees We have agreed to indemnify each of our executive officers and directors for certain events or occurrences arising as a result of the officer or director serving in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited. However, we have a directors’ and officers’ liability insurance policy that should enable us to recover a portion of future amounts paid. As a result of our insurance policy coverage, we believe the estimated fair value of these indemnification agreements is minimal and have no liabilities recorded for these agreements as of September 30, 2015 and December 31, 2014. We enter into indemnification provisions under our agreements with other companies in the ordinary course of business, typically with business partners, contractors, customers and landlords. Under these provisions we generally indemnify and hold harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of our activities or, in some cases, as a result of the indemnified party’s activities under the agreement. These indemnification provisions often include indemnifications relating to representations made by us with regard to intellectual property rights. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments we could be required to make under these indemnification provisions is unlimited. We have not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, we believe the estimated fair value of these agreements is minimal. Accordingly, we have no liabilities recorded for these indemnification provisions as of September 30, 2015 and December 31, 2014. Non-recurring Engineering Development Costs On February 4, 2011, we entered into an Analog Device Development Agreement with an effective date of January 24, 2010 (the “NN1001 Agreement”) with Texas Instruments (“TI”) pursuant to which TI integrated Neonode’s intellectual property into an Application Specific Integrated Circuit (“ASIC”) developed by TI. The NN1001 ASIC only can be sold by TI exclusively to licensees of Neonode. Under the terms of the NN1001 Agreement, we will reimburse TI up to $500,000 of non-recurring engineering (“NRE”) development costs based on shipments of the NN1001. Under the terms of the NN1001 Agreement, we will reimburse TI an NRE fee of $0.08 per unit for each of the first one million units sold and $0.05 for the next eight million units sold. During the three and nine months ended September 30, 2015 and 2014, approximately $0 and $20,000 and $14,000 and $93,000, respectively, of NRE expense related to the NN1001 Agreement is included in product research and development in the condensed consolidated statements of operations. The $500,000 of NRE development costs under the NN1001 agreement has been reached. Through September 30, 2015, all payments under the NN1001 Agreement have been made. On April 25, 2013, we entered into an additional Analog Device Development Agreement with an effective date of December 6, 2012 (the“NN1002 Agreement”) with TI pursuant to which TI will integrate our intellectual property into an ASIC developed by TI. The NN1002 ASIC only can be sold by TI exclusively to licensees of Neonode. Under the terms of the NN1002 Agreement, we will reimburse TI up to $500,000 of NRE costs based on shipments of the NN1002. Under the terms of the NN1002 Agreement we will reimburse TI an NRE fee of $0.25 per unit for each of the first two million units sold. The NN1002 has been released to mass production, yet no expense has been recorded. Through September 30, 2015, we had made no payments under the NN1002 Agreement. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Information [Abstract] | |
Segment Information | 7. Segment Information We have one reportable segment, which is comprised of the touch technology licensing business. All of our sales for the three and nine months ended September 30, 2015 and 2014 were to customers located in the U.S., Europe and Asia. Of our total assets, 58% and 85% were held in the U.S. as of September 30, 2015 and December 31, 2014, respectively, and 37% and 14% were held in Sweden, respectively. The following table presents net revenues by geographic region for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three months ended Three months ended Amount Percentage Amount Percentage Net revenues from customers in the Americas $ 1,856 60 % $ 746 66 % Net revenues from customers in Asia 475 15 % 380 34 % Net revenues from customers in Europe 782 25 % - - % $ 3,113 100 % $ 1,126 100 % Nine months ended Nine months ended Amount Percentage Amount Percentage Net revenues from customers in the Americas $ 5,105 63 % $ 1,764 59 % Net revenues from customers in Asia 1,155 14 % 1,216 40 % Net revenues from customers in Europe 1,892 23 % 25 1 % $ 8,152 100 % $ 3,005 100 % |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Net Loss Per Share [Abstract] | |
Net Loss Per Share | 8. Net Loss per Share Basic net loss per common share for the three and nine months ended September 30, 2015 and 2014 was computed by dividing the net loss attributable to Neonode Inc. for the relevant period by the weighted average number of shares of common stock outstanding. Diluted loss per common share is computed by dividing net loss attributable to Neonode Inc. by the weighted average number of shares of common stock and common stock equivalents outstanding. Potential common stock equivalents of approximately 24,000 and 0.1 million outstanding stock options and 0.1 million and 0.4 million outstanding stock warrants under the treasury stock method, and 11,000 and 11,000 shares issuable upon conversion of preferred stock are excluded from the diluted earnings per share calculation for the nine months ended September 30, 2015 and 2014, respectively, due to their anti-dilutive effect. (in thousands, except per share amounts) Three months ended 2015 2014 BASIC AND DILUTED Weighted average number of common shares outstanding 40,525 40,455 Net loss attributable to Neonode Inc. $ (1,368 ) $ (3,245 ) Net loss per share - basic and diluted $ (0.03 ) $ (0.08 ) (in thousands, except per share amounts) Nine months ended 2015 2014 BASIC AND DILUTED Weighted average number of common shares outstanding 40,493 39,219 Net loss attributable to Neonode Inc. $ (5,232 ) $ (11,127 ) Net loss per share - basic and diluted $ (0.13 ) $ (0.28 ) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 9. Subsequent Events On October 13, 2015, we issued 3,200,000 shares of our common stock to investors in connection with an equity financing transaction. These shares of common stock were a portion of the 5,000,000 shares previously registered in 2014 under a shelf registration statement. We issued the stock at $1.90 per share and raised approximately $6.1 million gross and received approximately $5.6 million in cash, net of direct offering costs including underwriting discounts and legal, audit and other regulatory costs of approximately $0.5 million. Per Bystedt (Board of Directors Chairman), Thomas Eriksson (Chief Executive Officer), and Mats Dahlin (member of our Board of Directors) purchased from the underwriter an aggregate of 157,893 shares of common stock in the offering at the public offering price per share for an aggregate purchase price of approximately $300,000. We anticipate using the net proceeds primarily for general corporate purposes, including capital expenditures and working capital. We have evaluated subsequent events through the filing date of this Form 10-Q, and determined that no other subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure in the notes thereto other than as discussed in the accompanying notes. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of Neonode Inc. and its wholly owned subsidiaries, as well as Pronode Technologies AB, a 51% majority owned subsidiary of Neonode Technologies AB. The remaining 49% of Pronode Technologies AB is owned by Propoint AB, located in Gothenburg, Sweden. Pronode Technologies AB was organized to sell engineering services within the automotive markets. All inter-company accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated balance sheet at September 30, 2015 and the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2015 and cash flows for the nine months ended September 30, 2015, include our accounts and those of our wholly owned subsidiaries, Neonode Technologies AB (Sweden), Neonode Americas Inc. (U.S.), Neonode Japan Inc. (Japan), NEON Technology Inc. (U.S.), Neno User Interface Solutions AB (Sweden), Neonode Korea Ltd. (South Korea) and Neonode Taiwan Ltd. (Taiwan), as well as Pronode Technologies AB (Sweden), a 51% majority owned subsidiary of Neonode Technologies AB. The noncontrolling interests in Pronode Technologies AB are reported separately under the heading “Net loss attributable to noncontrolling interests” in the condensed consolidated statements of operations, below comprehensive loss under the heading “Comprehensive income (loss) attributable to noncontrolling interests” in the condensed consolidated statements of comprehensive loss and shown as a separate component of stockholders’ (deficit) equity in the condensed consolidated balance sheet. See “Noncontrolling Interests” for further discussion. The audited condensed consolidated balance sheet at December 31, 2014 includes our accounts and those of our wholly owned subsidiaries, Neonode Technologies AB (Sweden), Neonode Americas Inc. (U.S.), Neonode Japan Inc. (Japan), NEON Technology Inc. (U.S.), Neno User Interface Solutions AB (Sweden) and Neonode Korea Ltd. (South Korea). The unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2014 and cash flows for the nine months ended September 30, 2014 include our accounts and those of our wholly owned subsidiaries, Neonode Technologies AB (Sweden), Neonode Americas Inc. (U.S.), Neonode Japan Inc. (Japan), NEON Technology Inc. (U.S.) and Neno User Interface Solutions AB (Sweden). |
Estimates | Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires making estimates and assumptions that affect, at the date of the consolidated financial statements, the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. Actual results could differ from these estimates. Significant estimates include, but are not limited to, collectability of accounts receivable, the achievement of substantive milestones and vendor-specific objective evidence (“VSOE”) of fair value for purposes of revenue recognition (or deferral of revenue), recoverability of capitalized project costs and long-lived assets, the valuation allowance related to our deferred tax assets and the fair value of options and warrants issued for stock-based compensation. |
Concentration of Cash Balance Risks | Concentration of Cash Balance Risks Cash balances are maintained at various banks in the U.S., Japan, Korea, Taiwan and Sweden. For deposits held with financial institutions in the U.S. the U.S. Federal Deposit Insurance Corporation, provides basic deposit coverage with limits up to $250,000 per owner. The Swedish government provides insurance coverage up to 100,000 Euro per customer and covers deposits in all types of accounts. The Japanese government provides insurance coverage up to 10,000,000 Yen per customer. The Korea Deposit Insurance Corporation provides insurance coverage up to 50,000,000 Won per customer. The Central Deposit Insurance Corporation in Taiwan provides insurance coverage up to 3,000,000 Taiwan Dollar per customer. At times, deposits held with financial institutions may exceed the amount of insurance provided. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Our accounts receivable are stated at net realizable value. Our policy is to maintain allowances for estimated losses resulting from the inability of our customers to make required payments. Credit limits are established through a process of reviewing the financial history and stability of each customer. Where appropriate, we obtain credit rating reports and financial statements of the customer when determining or modifying its credit limits. We regularly evaluate the collectability of our trade receivable balances based on a combination of factors. When a customer’s account balance becomes past due, we initiate dialogue with the customer to determine the cause. If it is determined that the customer will be unable to meet its financial obligation, such as in the case of a bankruptcy filing, deterioration in the customer’s operating results or financial position or other material events impacting its business, we record a specific allowance to reduce the related receivable to the amount we expect to recover. Should all efforts fail to recover the related receivable, we will write off the account. We also record an allowance for all customers based on certain other factors including the length of time the receivables are past due and historical collection experience with customers. Our allowance for doubtful accounts was $167,000 as of September 30, 2015 and December 31, 2014. |
Projects in process | Projects in Process Projects in process consist of costs incurred toward the completion of various projects for certain customers. These costs are primarily comprised of direct engineering labor costs and project-specific equipment costs. These costs are capitalized on our condensed consolidated balance sheet as an asset and deferred until revenue for each project is recognized in accordance with our revenue recognition policy. Costs capitalized in projects in process were $1,044,000 and $200,000 as of September 30, 2015 and December 31, 2014, respectively. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method based upon estimated useful lives of the assets as follows: Estimated useful lives Computer equipment 3 years Furniture and fixtures 5 years Equipment 7 years Equipment purchased under a capital lease is recognized over the term of the lease, if that lease term is shorter than the estimated useful life. Upon retirement or sale of property and equipment, cost and accumulated depreciation and amortization are removed from the accounts and any gains or losses are reflected in the condensed consolidated statement of operations. Maintenance and repairs are charged to expense as incurred. |
Long-lived Assets | Long-lived Assets We assess any impairment by estimating the future cash flow from the associated asset in accordance with relevant accounting guidance. If the estimated undiscounted future cash flow related to these assets decreases or the useful life is shorter than originally estimated, we may incur charges for impairment of these assets. As of September 30, 2015, we believe there was no impairment of our long-lived assets. There can be no assurance, however, that market conditions will not change or sufficient demand for our products and services will continue, which could result in impairment of long-lived assets in the future. |
Foreign Currency Translation and Transaction Gains and Losses | Foreign Currency Translation and Transaction Gains and Losses The functional currency of our foreign subsidiaries is the applicable local currency, the Swedish Krona, the Japanese Yen, the South Korean Won and the Taiwan Dollar. The translation from Swedish Krona, Japanese Yen, South Korean Won and Taiwan Dollar to U.S. Dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for income statement accounts using a weighted-average exchange rate during the period. Gains or (losses) resulting from translation are included as a separate component of accumulated other comprehensive income (loss). Foreign currency translation losses were $(20,000) and $(67,000) during the three and nine months ended September 30, 2015, respectively, compared to translation losses of $(82,000) and $(17,000) during the same periods in 2014, respectively. Gains resulting from foreign currency transactions are included in general and administrative expenses in the accompanying condensed consolidated statements of operations and were $11,000 and $42,000 during the three and nine months ended September 30, 2015, respectively, compared to $86,000 and $120,000 during the same periods in 2014, respectively. |
Concentration of Credit and Business Risks | Concentration of Credit and Business Risks Our customers are located in U.S., Europe and Asia. As of September 30, 2015, five customers represented approximately 83% of the Company’s accounts receivable. As of December 31, 2014, three customers represented approximately 87% of the Company’s accounts receivable. Our net revenues for the three and nine months ended September 30, 2015 were earned from twenty-three and thirty-five customers, respectively. Customers who accounted for 10% or more of our net revenues during the three months ended September 30, 2015 are as follows: ● Barnes & Noble – 22% ● Hewlett Packard Company – 21% ● Autoliv Development AB – 18% Customers who accounted for 10% or more of our net revenues during the nine months ended September 30, 2015 are as follows: ● Hewlett Packard Company –26% ● Amazon – 15% ● Autoliv Development AB – 18% Our net revenues for the three and nine months ended September 30, 2014 were earned from sixteen and twenty-eight customers. Customers who accounted for 10% or more of our net revenues during the three months ended September 30, 2014 are as follows: ● Hewlett Packard Company – 30% Customers who accounted for 10% or more of our net revenues during the nine months ended September 30, 2014 are as follows: ● Hewlett Packard Company – 16% ● Kobo Inc. – 10% ● Netronix Inc. – 10% ● Leap Frog – 13% |
Revenue Recognition | Revenue Recognition Licensing Revenues: We derive revenue from the licensing of internally developed intellectual property (“IP”). We enter into IP licensing agreements that generally provide licensees the right to incorporate our IP components in their products with terms and conditions that vary by licensee. Fees under these agreements may include license fees relating to our IP and royalties payable following the distribution by our licensees of products incorporating the licensed technology. The license for our IP has standalone value and can be used by the licensee without maintenance and support. We follow U.S. GAAP for revenue recognition as per unit royalty products are distributed or licensed by our customers. For technology license arrangements that do not require significant modification or customization of the underlying technology, we recognize technology license revenue when: (1) we enter into a legally binding arrangement with a customer for the license of technology; (2) the customer distributes or licenses the products; (3) the customer payment is deemed fixed or determinable and free of contingencies or significant uncertainties; and (4) collection is reasonably assured. Our customers report to us the quantities of products distributed or licensed by them after the end of the reporting period stipulated in the contract, generally 30 to 45 days after the end of the month or quarter. We recognize licensing revenue in the period in which royalty reports are received, rather than the period in which the products are distributed or to which the license relates. Explicit return rights are not offered to customers. There have been no returns through September 30, 2015. Engineering Services: We may sell engineering consulting services to our customers on a flat rate or hourly rate basis. We recognize revenue from these services when all of the following conditions are met: (1) evidence existed of an arrangement with the customer, typically consisting of a purchase order or contract; (2) our services were performed and risk of loss passed to the customer; (3) we completed all of the necessary terms of the contract; (4) the amount of revenue to which we were entitled was fixed or determinable; and (5) we believed it was probable that we would be able to collect the amount due from the customer. To the extent that one or more of these conditions has not been satisfied, we defer recognition of revenue. Generally, we recognize revenue as the engineering services stipulated under the contract are completed and accepted by our customers. Engineering services are performed under a signed Statement of Work (“SOW”) with a customer. The deliverables and payment terms stipulated under the SOW provide guidance on the project revenue recognition. Revenues from contracts that are short-term in nature and related costs that are difficult to estimate are accounted for under the completed contract method. Revenues from contracts with substantive defined milestones that we have determined are reasonable, relevant to all the deliverables and payment terms in the SOW that are commensurate with the efforts required to achieve the milestones are recognized under the milestone recognition method. Estimated losses on all SOW projects are recognized in full as soon as they become evident. In the quarters ended September 30, 2015 and 2014, $165,000 and $0 were recorded as cost of sales due to expected losses related to two SOW projects, respectively. |
Deferred revenues | Deferred Revenues From time-to-time we receive pre-payments from our customers related to future services or future license fee revenues. We defer the license fees until we have met all accounting requirements for revenue recognition as per unit royalty products are distributed and royalty reports are received. Engineering development fee revenues are deferred until such time as the engineering work has been completed and accepted by our customers. |
Advertising | Advertising Advertising costs are expensed as incurred. Advertising costs for the three and nine months ended September 30, 2015 amounted to approximately $46,000 and $74,000, respectively. Advertising costs for the three and nine months ended September 30, 2014 amounted to approximately $18,000 and $147,000, respectively. |
Product Research and Development | Product Research and Development Research and development (“R&D”) costs are expensed as incurred. R&D costs consist mainly of personnel related costs in addition to some external consultancy costs such as testing, certifying and measurements. |
Stock-based compensation expense | Stock-Based Compensation Expense We measure the cost of employee services received in exchange for an award of equity instruments, including stock options, based on the estimated fair value of the award on the grant date, and recognize the value as compensation expense over the period the employee is required to provide services in exchange for the award, usually the vesting period, net of estimated forfeitures. We account for equity instruments issued to non-employees at their estimated fair value. The measurement date for the estimated fair value for the equity instruments issued is determined at the earlier of (1) the date at which a commitment for performance by the consultant or vendor is reached, or (2) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instruments is primarily recognized over the term of the consulting agreement. The estimated fair value of the stock-based compensation is periodically re-measured and income or expense is recognized during the vesting term. When determining stock-based compensation expense involving options and warrants, we determine the estimated fair value of options and warrants using the Black-Scholes option pricing model. |
Noncontrolling Interests | Noncontrolling Interests The Company provides either in the condensed consolidated statement of changes in equity, if presented, or in the notes to consolidated financial statements, a reconciliation at the beginning and the end of the period of the carrying amount of total equity (net assets), equity (net assets) attributable to the parent, and equity (net assets) attributable to the noncontrolling interest that separately discloses: (1) Net income. (2) Transactions with owners acting in their capacity as owners, showing separately contributions from and distributions to owners. (3) Each component of other comprehensive income. |
Income Taxes | Income Taxes We recognize deferred tax liabilities and assets for the expected future tax consequences of items that have been included in the consolidated financial statements or tax returns. We estimate income taxes based on rates in effect in each of the jurisdictions in which we operate. Deferred income tax assets and liabilities are determined based upon differences between the financial statement and income tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The realization of deferred tax assets is based on historical tax positions and expectations about future taxable income. Valuation allowances are recorded against net deferred tax assets when, in our opinion, realization is uncertain based on the “more likely than not” criteria of the accounting guidance. Based on the uncertainty of future pre-tax income, we fully reserved our net deferred tax assets as of September 30, 2015 and December 31, 2014. In the event we were to determine that we would be able to realize our deferred tax assets in the future, an adjustment to the deferred tax asset would increase income in the period such determination was made. The provision for income taxes represents the net change in deferred tax amounts, plus income taxes paid or payable for the current period. We follow U.S. GAAP related accounting for uncertainty in income taxes, which provisions include a two-step approach to recognizing, de-recognizing and measuring uncertainty in income taxes. As a result, we did not recognize a liability for unrecognized tax benefits. As of September 30, 2015 and December 31, 2014, we had no unrecognized tax benefits. |
Net Loss Per Share | Net Loss per Share Net loss per share amounts has been computed based on the weighted average number of shares of common stock outstanding during the three and nine months ended September 30, 2015 and 2014. Net loss per share, assuming dilution amounts from common stock equivalents, is computed based on the weighted-average number of shares of common stock and potential common stock equivalents outstanding during the period. The weighted-average number of shares of common stock and potential common stock equivalents used in computing the net loss per share for the three and nine months ended September 30, 2015 and 2014 exclude the potential common stock equivalents, as the effect would be anti-dilutive (See Note 8). |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Our other comprehensive income (loss) includes foreign currency translation gains and losses. The cumulative amount of translation gains and losses are reflected as a separate component of stockholders’ equity in the condensed consolidated balance sheets as accumulated other comprehensive income. |
Cash Flow Information | Cash Flow Information Cash flows in foreign currencies have been converted to U.S. dollars at an approximate weighted-average exchange rate for the respective reporting periods. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 8.47 and 6.94 Swedish Krona to one U.S. Dollar for the three months ended September 30, 2015 and 2014, respectively. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 8.40 and 6.67 Swedish Krona to one U.S. Dollar for the nine months ended September 30, 2015 and 2014, respectively. The exchange rate for the condensed consolidated balance sheets was 8.42 and 7.80 Swedish Krona to one U.S. Dollar as of September 30, 2015 and December 31, 2014, respectively. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 122.23 and 103.87 Japanese Yen to one U.S. Dollar for the three months ended September 30, 2015 and 2014, respectively. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 120.90 and 102.94 Japanese Yen to one U.S. Dollar for the nine months ended September 30, 2015 and 2014, respectively. The exchange rate for the condensed consolidated balance sheets was 119.75 and 119.93 Japanese Yen to one U.S. Dollar as of September 30, 2015 and December 31, 2014, respectively. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 1,167.99 South Korean Won to one U.S. Dollar for the three months ended September 30, 2015. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 1,121.60 South Korean Won to one U.S. Dollar for the nine months ended September 30, 2015. The exchange rate for the condensed consolidated balance sheets was 1,195.03 and 1,096.73 South Korean Won to one U.S. Dollar as of September 30, 2015 and December 31, 2014, respectively. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 31.95 Taiwan Dollar to one U.S. Dollar for the three months ended September 30, 2015. The weighted-average exchange rate for the condensed consolidated statements of operations and comprehensive loss was 31.43 Taiwan Dollar to one U.S. Dollar for the nine months ended September 30, 2015. The exchange rate for the condensed consolidated balance sheet was 33.06 Taiwan Dollar to one U.S. Dollar as of September 30, 2015. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We disclose the estimated fair values for all financial instruments for which it is practicable to estimate fair value. Financial instruments including cash, accounts receivable, accounts payable and accrued expenses and are deemed to approximate fair value due to their short maturities. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers (Topic 606)” In August 2014, the FASB issued ASU No. 2014-15, “ Presentation of Financial Statements - Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Estimated useful lives of property and equipment | Computer equipment 3 years Furniture and fixtures 5 years Equipment 7 years |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity [Abstract] | |
Schedule of conversion of preferred stock issued to common stock | Shares of Preferred Stock Not Exchanged Conversion Ratio Shares of Common Stock after Conversion of all Outstanding Shares of Preferred Stock Not yet Exchanged at September 30, 2015 Series B Preferred stock 83 132.07 10,962 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of stock-based compensation expense | Three months ended Nine months ended 2015 2014 2015 2014 Product research and development $ 100 $ 73 $ 422 $ 433 Sales and marketing 68 51 240 302 General and administrative 8 55 286 859 Total stock-based compensation expense $ 176 $ 179 $ 948 $ 1,594 Remaining unrecognized Stock-based compensation $ 862 |
Summary of assumptions used to value stock options granted to employees and directors | For the nine months ended September 30, 2015 Annual dividend yield - Expected life (years) 1.50 – 4.35 Risk-free interest rate 0.47% - 1.41% Expected volatility 68% - 72% |
Summary of all warrant activity | September 30, 2015 Outstanding and exercisable Warrants Weighted Average Exercise Price Weighted Average January 1, 2015 3,335,073 $ 4.45 0.93 Granted -- -- -- Expired/cancelled (16,000 ) 1.00 -- Exercised (80,000 ) 0.50 -- Outstanding and exercisable, September 30, 2015 3,239,073 $ 4.57 0.17 |
Employee Stock Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of all stock option plans / warrant activity | Number of Options Outstanding Weighted Average Exercise Price Outstanding at January 1, 2015 1,709,400 $ 4.92 Granted 590,000 3.56 Expired (3,200 ) 86.25 Outstanding at September 30, 2015 2,296,200 $ 4.46 |
Warrant [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of all stock option plans / warrant activity | Description Issue Date Exercise Price Shares Expiration Date December 2010 Employee Warrants 12/3/2010 $ 1.63 200,000 12/3/2015 February 2011 Legal Advisor Warrant 2/22/2011 $ 2.00 80,000 2/22/2016 March 2011 Investor Warrants 3/9/2011 $ 3.13 349,973 3/9/2016 March 2011 Investor Warrants 4/7/2011 $ 3.13 34,100 4/7/2016 May 2014 Agent Warrant 5/15/2014 $ 5.09 75,000 11/15/2015 May 2014 Investor Warrant 5/15/2014 $ 5.09 2,500,000 11/15/2015 Total Warrants Outstanding 3,239,073 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Information [Abstract] | |
Summary of net revenues by geographic region | Three months ended Three months ended Amount Percentage Amount Percentage Net revenues from customers in the Americas $ 1,856 60 % $ 746 66 % Net revenues from customers in Asia 475 15 % 380 34 % Net revenues from customers in Europe 782 25 % - - % $ 3,113 100 % $ 1,126 100 % Nine months ended Nine months ended Amount Percentage Amount Percentage Net revenues from customers in the Americas $ 5,105 63 % $ 1,764 59 % Net revenues from customers in Asia 1,155 14 % 1,216 40 % Net revenues from customers in Europe 1,892 23 % 25 1 % $ 8,152 100 % $ 3,005 100 % |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Net Loss Per Share [Abstract] | |
Basic and diluted for net loss per share | (in thousands, except per share amounts) Three months ended 2015 2014 BASIC AND DILUTED Weighted average number of common shares outstanding 40,525 40,455 Net loss attributable to Neonode Inc. $ (1,368 ) $ (3,245 ) Net loss per share - basic and diluted $ (0.03 ) $ (0.08 ) (in thousands, except per share amounts) Nine months ended 2015 2014 BASIC AND DILUTED Weighted average number of common shares outstanding 40,493 39,219 Net loss attributable to Neonode Inc. $ (5,232 ) $ (11,127 ) Net loss per share - basic and diluted $ (0.13 ) $ (0.28 ) |
Interim Period Reporting (Detai
Interim Period Reporting (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Oct. 13, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Interim Period Reporting (Textual) | ||||||
Net loss | $ (1,368) | $ (3,245) | $ (5,232) | $ (11,127) | ||
Accumulated deficit | $ (171,161) | (171,161) | $ (165,929) | |||
Net cash used in operating activities | $ (4,886) | (9,053) | ||||
Proceeds from issuance of common stock | $ 9,253 | |||||
Common stock available for issuance under shelf registration | 5,000,000 | |||||
Subsequent Event [Member] | ||||||
Interim Period Reporting (Textual) | ||||||
Issuance of common stock, shares | 3,200,000 | |||||
Share price | $ 1.90 | |||||
Proceeds from issuance of common stock | $ 5,600 | |||||
Common stock available for issuance under shelf registration | 1,800,000 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Computer equipment [Member] | |
Estimated useful lives of property and equipment | |
Estimated useful lives | 3 years |
Furniture and fixtures [Member] | |
Estimated useful lives of property and equipment | |
Estimated useful lives | 5 years |
Equipment [Member] | |
Estimated useful lives of property and equipment | |
Estimated useful lives | 7 years |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Details Textual) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2015USD ($)Customers | Sep. 30, 2014USD ($)Customers | Sep. 30, 2015USD ($)Customers | Sep. 30, 2014USD ($)Customers | Dec. 31, 2014USD ($)Customers | Sep. 30, 2015JPY (¥) | Sep. 30, 2015SEK | Sep. 30, 2015KRW (₩) | |
Summary of Significant Accounting Policies (Textual) | ||||||||
Basic deposit coverage limits per owner and customer | $ 250,000 | $ 250,000 | ¥ 10,000,000 | SEK 100,000 | ₩ 50,000,000 | |||
Allowance for doubtful accounts | 167,000 | 167,000 | $ 167,000 | |||||
Environmental Costs Recognized, Capitalized in Period | 1,044,000 | $ 200,000 | ||||||
Foreign currency translation adjustments | (20,000) | $ (82,000) | (67,000) | $ (17,000) | ||||
Foreign currency translation included in general and administrative expense | 11,000 | 86,000 | 42,000 | 120,000 | ||||
Advertising costs | $ 46,000 | $ 18,000 | $ 74,000 | $ 147,000 | ||||
Exchange rate for the consolidated balance sheets (Swedish Krona to one U.S. Dollar) | 8.42 | 8.42 | 7.80 | 8.42 | 8.42 | 8.42 | ||
Weighted-average exchange rate for consolidated statements of operations (Swedish Krona to one U.S. Dollar) | 8.47 | 6.94 | 8.40 | 6.67 | ||||
Weighted-average exchange rate for consolidated statements of operations (Japanese Yen to one U.S. Dollar) | 122.23% | 103.87% | 120.90% | 102.94% | ||||
Exchange rate for the consolidated balance sheets (Japanese Yen to one U.S. Dollar ) | 119.75% | 119.75% | 119.93% | 119.75% | 119.75% | 119.75% | ||
Weighted-average exchange rate (South korean to one U.S. Dollar) | 1,167.99 | 1,121.60 | ||||||
Number of customers | Customers | 23 | 16 | 35 | 28 | ||||
Central Deposit Insurance Corporation | $ 3,000,000 | $ 3,000,000 | ||||||
Weighted-average exchange rate (Taiwan Dollar to one U.S) | 31.95 | 31.43 | ||||||
Exchange rate for the consolidated balance sheets (Taiwan Dollar to one U.S) | 33.06 | 33.06 | 33.06 | 33.06 | 33.06 | |||
Exchange rate for the consolidated balance sheets (South korean to one U.S. Dollar ) | 1,195.03 | 1,195.03 | 1,096.73 | 1,195.03 | 1,195.03 | 1,195.03 | ||
Noncontrolling interest owned by Pronode Technologies AB | 51.00% | 51.00% | 51.00% | 51.00% | 51.00% | |||
Noncontrolling interest owned by Propoint AB | 49.00% | 49.00% | 49.00% | 49.00% | 49.00% | |||
Cost of sales | $ 165,000 | $ 0 | ||||||
Noncontrolling interest, description | Noncontrolling interests partners have less than 50% share of voting rights at any one of the subsidiary level companies. | |||||||
Accounts Receivable [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Concentration risk, Percentage | 83.00% | 87.00% | ||||||
Number of customers | Customers | 5 | 3 | ||||||
Sales Revenue, Net [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Concentration risk, Percentage | 10.00% | 10.00% | 10.00% | 10.00% | ||||
Hewlett Packard [Member] | Sales Revenue, Net [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Concentration risk, Percentage | 21.00% | 30.00% | 26.00% | 16.00% | ||||
Kobo Inc [Member] | Sales Revenue, Net [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Concentration risk, Percentage | 10.00% | |||||||
Leap Frog Enterprises Inc [Member] | Sales Revenue, Net [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Concentration risk, Percentage | 13.00% | |||||||
Netronix Inc [Member] | Sales Revenue, Net [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Concentration risk, Percentage | 10.00% | |||||||
Amazon Inc [Member] | Sales Revenue, Net [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Concentration risk, Percentage | 15.00% | |||||||
Autoliv Development AB [Member] | Sales Revenue, Net [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Concentration risk, Percentage | 18.00% | 18.00% | ||||||
Barnes & Noble [Member] | Sales Revenue, Net [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Concentration risk, Percentage | 22.00% |
Deferred Revenues (Details)
Deferred Revenues (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015USD ($)Customers | Dec. 31, 2014USD ($)Customers | |
Deferred Revenues (Textual) | ||
Deferred license fee revenue | $ 1,873 | $ 3,403 |
Prepayments for Future License Fees [Member] | ||
Deferred Revenues (Textual) | ||
Deferred license fee revenue | $ 1,100 | $ 3,000 |
Number of customer | Customers | 2 | 5 |
Deferred Engineering Development Fees [Member] | ||
Deferred Revenues (Textual) | ||
Deferred license fee revenue | $ 800 | $ 400 |
Number of customer | Customers | 1 | 5 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Series B Preferred Stock [Member] | 1 Months Ended | 9 Months Ended |
Mar. 31, 2009shares | Sep. 30, 2015shares | |
Schedule of conversion of preferred stock issued to common stock | ||
Shares of Common Stock after Conversion of all Outstanding Shares of Preferred Stock Not yet Exchanged | 132.07 | 10,962 |
Shares of Preferred Stock Not Exchanged | 83 | |
Conversion Ratio | 132.07 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - $ / shares | 1 Months Ended | 9 Months Ended | |
Mar. 31, 2009 | Sep. 30, 2015 | Dec. 31, 2014 | |
Series B Preferred Stock [Member] | |||
Stockholders' Equity (Textual) | |||
Preferred stock, liquidation preference | $ 0.001 | $ 0.001 | |
Conversion of shares | 132.07 | 10,962 | |
Common Stock [Member] | |||
Stockholders' Equity (Textual) | |||
Warrants issued to purchase shares of common stock | 80,000 | ||
Common stock purchased by exercise of warrants | 69,632 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Summary of stock-based compensation expense | ||||
Total stock based compensation expense | $ 176 | $ 179 | $ 948 | $ 1,594 |
Remaining unrecognized expense of stock-based compensation | 862 | 862 | ||
Product Research and Development [Member] | ||||
Summary of stock-based compensation expense | ||||
Total stock based compensation expense | 100 | 73 | 422 | 433 |
Sales and Marketing [Member] | ||||
Summary of stock-based compensation expense | ||||
Total stock based compensation expense | 68 | 51 | 240 | 302 |
General and Administrative [Member] | ||||
Summary of stock-based compensation expense | ||||
Total stock based compensation expense | $ 8 | $ 55 | $ 286 | $ 859 |
Stock-Based Compensation (Det29
Stock-Based Compensation (Details 1) - Stock Options [Member] | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Summary of all stock option plans | |
Number of Options/Warrants Outstanding, Beginning Balance | shares | 1,709,400 |
Number of Options Outstanding, Granted | shares | 590,000 |
Number of Options Outstanding, Granted, Expired/forfeited | shares | (3,200) |
Number of Options/Warrants Outstanding, Ending Balance | shares | 2,296,200 |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 4.92 |
Weighted Average Exercise Price, Granted | 3.56 |
Weighted Average Exercise Price, Expired/cancelled | 86.25 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ 4.46 |
Stock-Based Compensation (Det30
Stock-Based Compensation (Details 2) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of assumptions used to value stock options granted to employees,directors and consultants | |
Annual dividend yield | |
Minimum [Member] | |
Summary of assumptions used to value stock options granted to employees,directors and consultants | |
Expected life (years) | 1 year 6 months |
Risk-free interest rate | 0.47% |
Expected volatility | 68.00% |
Maximum [Member] | |
Summary of assumptions used to value stock options granted to employees,directors and consultants | |
Expected life (years) | 4 years 4 months 6 days |
Risk-free interest rate | 1.41% |
Expected volatility | 72.00% |
Stock-Based Compensation (Det31
Stock-Based Compensation (Details 3) - Warrant [Member] | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Summary of all stock option plans | |
Number of Options/Warrants Outstanding, Beginning Balance | shares | 3,335,073 |
Warrants, Granted | shares | |
Warrants, Expired/cancelled | shares | (16,000) |
Warrants, Exercised | shares | (80,000) |
Number of Options/Warrants Outstanding, Ending Balance | shares | 3,239,073 |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 4.45 |
Weighted Average Exercise Price, Granted | |
Weighted Average Exercise Price, Expired/cancelled | $ 1 |
Weighted Average Exercise Price, Exercised | 0.50 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ 4.57 |
Weighted Average Remaining Contractual Life, Outstanding and exercisable, Beginning Balance | 11 months 5 days |
Weighted Average Remaining Contractual Life, Outstanding and exercisable, Ending Balance | 2 months 1 day |
Stock-Based Compensation (Det32
Stock-Based Compensation (Details 4) | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Summary of outstanding warrants to purchase common stock | |
Shares | 3,239,073 |
December 2010 Employee Warrants [Member] | |
Summary of outstanding warrants to purchase common stock | |
Issue Date | Dec. 3, 2010 |
Exercise Price | $ / shares | $ 1.63 |
Shares | 200,000 |
Expiration Date | Dec. 3, 2015 |
February 2011 Legal Advisor Warrant [Member] | |
Summary of outstanding warrants to purchase common stock | |
Issue Date | Feb. 22, 2011 |
Exercise Price | $ / shares | $ 2 |
Shares | 80,000 |
Expiration Date | Feb. 22, 2016 |
March 2011 Investor Warrants [Member] | |
Summary of outstanding warrants to purchase common stock | |
Issue Date | Mar. 9, 2011 |
Exercise Price | $ / shares | $ 3.13 |
Shares | 349,973 |
Expiration Date | Mar. 9, 2016 |
March 2011 Investor Warrants [Member] | |
Summary of outstanding warrants to purchase common stock | |
Issue Date | Apr. 7, 2011 |
Exercise Price | $ / shares | $ 3.13 |
Shares | 34,100 |
Expiration Date | Apr. 7, 2016 |
May 2014 Agent Warrant [Member] | |
Summary of outstanding warrants to purchase common stock | |
Issue Date | May 15, 2014 |
Exercise Price | $ / shares | $ 5.09 |
Shares | 75,000 |
Expiration Date | Nov. 15, 2015 |
May 2014 Investor Warrant [Member] | |
Summary of outstanding warrants to purchase common stock | |
Issue Date | May 15, 2014 |
Exercise Price | $ / shares | $ 5.09 |
Shares | 2,500,000 |
Expiration Date | Nov. 15, 2015 |
Stock Based Compensation (Detai
Stock Based Compensation (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Stock-Based Compensation (Textual) | |||||
Aggregate vested options to purchase shares | 265,000 | 265,000 | |||
Exercise price | $ 4.15 | ||||
Expire date | Mar. 3, 2018 | ||||
Purchase price of stock options per share | $ 0.70 | ||||
Purchase price of stock options amount | $ 185,500 | ||||
Vesting period | 1 year 8 months 12 days | ||||
Share-based compensation expense | $ 176,000 | $ 179,000 | $ 948,000 | $ 1,594,000 | |
Stock Options [Member] | |||||
Stock-Based Compensation (Textual) | |||||
Aggregate vested options to purchase shares | 265,000 | 265,000 | |||
Number of Options Outstanding | 2,296,200 | 2,296,200 | 1,709,400 | ||
Options outstanding, vested and expected to vest, aggregate intrinsic value | $ 13,000 | $ 13,000 | |||
Options granted to purchase of common stock to employee | 500,000 | ||||
Options granted to purchase of common stock to board members | 90,000 | ||||
Options granted to purchase of common stock to board members, fair value | $ 700,000 | ||||
Weighted-average grant date fair value of the options granted per share | $ 1.26 | ||||
Common stock reserved for awards | 2,100,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Dec. 06, 2012 | Jan. 24, 2010 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Commitments and Contingencies (Textual) | ||||||
Non-recurring engineering development costs contributed to TI | $ 500,000 | $ 500,000 | ||||
Description of NRE cost contributed to TI | Under the terms of the NN1002 Agreement we will reimburse TI an NRE fee of $0.25 per unit for each of the first two million units sold. | Under the terms of the NN1001 Agreement, we will reimburse TI an NRE fee of $0.08 per unit for each of the first one million units sold and $0.05 for the next eight million units sold. | The $500,000 of NRE development costs under the NN1001 agreement has been reached. | |||
NRE cost contributed for each of first one million unit sold, Per unit | $ 0.08 | |||||
NRE cost contributed for next eight million unit sold, Per unit | $ 0.05 | |||||
NRE fee contributed for each of first two million unit sold, Per unit | $ 0.25 | |||||
Non recurring expense included in product research and development | $ 0 | $ 14,000 | $ 20,000 | $ 93,000 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Summary of net revenues by geographic region | ||||
Net revenues | $ 3,113 | $ 1,126 | $ 8,152 | $ 3,005 |
Revenues percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Americas [Member] | ||||
Summary of net revenues by geographic region | ||||
Net revenues | $ 1,856 | $ 746 | $ 5,105 | $ 1,764 |
Revenues percentage | 60.00% | 66.00% | 63.00% | 59.00% |
Asia [Member] | ||||
Summary of net revenues by geographic region | ||||
Net revenues | $ 475 | $ 380 | $ 1,155 | $ 1,216 |
Revenues percentage | 15.00% | 34.00% | 14.00% | 40.00% |
Europe [Member] | ||||
Summary of net revenues by geographic region | ||||
Net revenues | $ 782 | $ 1,892 | $ 25 | |
Revenues percentage | 25.00% | 23.00% | 1.00% |
Segment Information (Details Te
Segment Information (Details Textual) - Segment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Segment Information (Textual) | ||
Number of reportable segments | 1 | |
U.S. [Member] | ||
Segment Information (Textual) | ||
Percentage of sales | 58.00% | 85.00% |
Sweden [Member] | ||
Segment Information (Textual) | ||
Percentage of sales | 37.00% | 14.00% |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
BASIC AND DILUTED | ||||
Weighted average number of common shares outstanding | 40,525 | 40,455 | 40,493 | 39,219 |
Net loss attributable to Neonode Inc. | $ (1,368) | $ (3,245) | $ (5,232) | $ (11,127) |
Net loss per share - basic and diluted | $ (0.03) | $ (0.08) | $ (0.13) | $ (0.28) |
Net Loss Per Share (Details Tex
Net Loss Per Share (Details Textual) - shares | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Stock Option [Member] | ||
Net Loss Per Share (Textual) | ||
Antidilutive securities excluded from computation of earnings per share | 24,000 | 100,000 |
Warrant [Member] | ||
Net Loss Per Share (Textual) | ||
Antidilutive securities excluded from computation of earnings per share | 100,000 | 400,000 |
Convertible Preferred Stock [Member] | ||
Net Loss Per Share (Textual) | ||
Antidilutive securities excluded from computation of earnings per share | 11,000 | 11,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Oct. 13, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Subsequent Event (Textual) | ||||
Proceeds from issuance of common stock | $ 9,253,000 | |||
Common stock available for issuance under shelf registration | 5,000,000 | |||
Subsequent Event [Member] | ||||
Subsequent Event (Textual) | ||||
Issuance of common stock, shares | 3,200,000 | |||
Issuance of common stock | $ 6,100,000 | |||
Share price | $ 1.90 | |||
Proceeds from issuance of common stock | $ 5,600,000 | |||
Common stock available for issuance under shelf registration | 1,800,000 | |||
Common stock offering cost | $ 500,000 | |||
Subsequent Event [Member] | Board of Directors Chairman, Chief Executive Officer and Member of Board of Directors [Member] | ||||
Subsequent Event (Textual) | ||||
Common stock issued at public offering | $ 300,000 | |||
Common stock issued at public offering, shares | 157,893 |